How Much Car Can I Afford?
Use This Simple Rule to Find Out
Go ahead, and ask a financial expert this question,
and chances are you’re bound to get quite a few answers.
There is no one size fits all answer financial experts agree on when it comes to how much “Car” you can afford.
Chances are, you might not be able to afford the car you truly desire, but you’re looking for affordability.
Your salary should determine what car you can afford!
Within five years (60 months) a car loses on average 60% of the initial purchase value.
in 2019, the average car loan term was 68 months!
So a $20,000 car at purchase would be worth $8,000 or less in five years – with still eight more months of payments to go!
Because there are other expenses to consider, such as taxes, insurance, fuel, and auto maintenance.
For these reasons, this is why car buying shouldn’t be about what you want –
but what you can afford!
Most car purchases start as an idea, and end with the question, “
How much can I afford monthly for a new car?”
Affordable Monthly Car Payments
However, that doesn’t necessarily help you when it comes to your monthly car payment.
Ideally, the best rule to follow when buying a car is the 25% gross salary rule,
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